North Carolina students: “There may be a better way to expand Medicaid”

Duke and UNC students may have solved North Carolina’s Medicaid problems, if only lawmakers would listen. In 2014, a graduate research team produced a report on North Carolina’s Medicaid options. Their report included an overview of the status quo and an analysis of three frameworks for Medicaid expansion:

1) Traditional Medicaid expansion, in which the state enrolls all newly eligible residents in the current program;

2) A private option, in which North Carolina follows Arkansas’s lead and enrolls newly eligible residents in private plans from the insurance marketplace; and

3) A “hybrid” option that enrolls individuals either in Medicaid or in private plans, depending on their income level.

Based on their analysis, the hybrid option looks like North Carolina’s best choice.

Here’s what the hybrid plan could look like: the state would use federal funds to enroll all individuals living at or below the poverty line in Medicaid. That means doing away with all eligibility requirements besides income (current requirements include having dependents or living with a disability). North Carolina would also use federal funds to enroll individuals between 100 and 138 percent of the federal poverty line in private plans from the state’s insurance marketplace.

“At an average extra cost of $71 million per year, the state would spend less than half of what it does on interest for debts while bringing health coverage to more than 600,000 North Carolinians by 2020.”[i]

Following Arkansas’s lead to private insurance plans may prove to be a costly mistake. The department of Health and Human Services originally approved Arkansas’s plan, but according to federal auditors, budget officials severely underestimated implementation costs.[ii] More recent estimates put the total costs at $778 million higher than originally predicted.

Similarly, full Medicaid expansion in North Carolina has significant political obstacles. While Governor McCrory has indicated that he’s open to expanding[iii], the General Assembly has not been flexible. That’s why this hybrid plan makes sense: “it represents a middle-of-the-road, bipartisan approach that utilizes both the public safety net and the free market to meet the health care needs of North Carolina citizens.”[iv]

Lawmakers and advocates alike must be open to innovative policy solutions like this one in order to push past partisan gridlock and support its citizens.